Cross State Insurance Sales

In an effort to increase the availability and affordability of individual health insurance, some lawmakers are suggesting that insurers be allowed to sell individual health insurance policies across state lines under the authority of the approval of the policy in just one state. The policies would be governed under the laws and regulations of the primary state.

NAIFA Employee Benefits supports efforts to make health insurance more available and more affordable. However, there are issues of concern regarding policy pricing, as well as licensing (and oversight) of agents and advisors selling primary state individual health insurance in secondary states. An effective cross-state individual health insurance sales regime must address issues involving the effectiveness of state regulation by a state that is not the state of domicile of the purchaser. Questions about whether this law would preempt conflicting state laws also must be addressed, as must questions about the impact of a potential withdrawal by an insurer from a specific area of risk or a particular line of business. The challenge we face is the cost of health care of which insurance premiums are a direct bi-product.  Close financial oversight by each state’s office or commissioner of insurance has helped protect the consumer purchasing financial protection from catastrophic health care expenses.  This type of oversight would be compromised under proposals to allow the sale of health insurance across state lines unless multiple state regulatory issues are addressed.